Senator: Find $2B to Undo Troop Benefit Cuts

A leading Republican senator in Congress is asking his colleagues to find $2 billion in the federal budget to offset proposed reductions to troop pay and benefits.

Sen. Lindsey Graham, R-S.C., a member of the Senate Armed Services Committee, made the proposal during a hearing Wednesday of the panel's Military Personnel Subcommittee.

"Here's the challenge for this subcommittee," he said. "Could we find $2 billion outside the Department of Defense or even inside the Department of Defense that would avoid us having to make structural decisions about commissaries, about Tricare and other things, about compensation?"

The Defense Department's proposed budget for fiscal 2015, which begins Oct. 1, would reduce military pay raises to 1 percent and eventually cut housing allowances by an average of 6 percent. The changes are part of a larger effort by Pentagon officials to curb rising personnel costs by scaling back military compensation, consolidating health care plans and reducing commissary subsidies.

Graham, an attorney who has served as an officer in the Air Force Reserve, proposed using the funding next year as a "safety-valve" to give a congressionally mandated commission more time to study the issue. The panel, known as the Military Compensation and Retirement Modernization Commission, is expected to make its recommendations next February.

"To me, that would be a great exercise because the structural changes that are going to come -- and they will come -- have to be better thought out," Graham said. "If you're going to ask people to give up housing allowances, pay 5 percent or whatever, I'd just like to make it a more thoughtful process and be able to go to these folks and say, ‘We've had people, the best minds in the country, outside the administration, outside the Congress, to look at this.'"

Pentagon Comptroller Bob Hale, who was among several department officials testifying at the hearing, defended the proposals, saying they were the result of more than a dozen meetings between senior civilian and military officials, including the top generals of each of the services.

"In the end, with all due respect to the commission, I think they [the service chiefs] have a great deal of expertise and they are the ones who you want to make recommendations," Hale said.

Hale also said Graham's proposal would force the department to make bigger cuts over the next five years, known in Pentagon parlance as the Future Years Defense Plan, of FYDP (pronounced "fi-dep").

"It's just not the $2.1 billion in fiscal 2015 -- if you delay all these, the whole budget slips and so we're going to have to take another $10 billion or so out of the FYDP," he said. "What you're doing is forcing further cuts in perhaps numbers of personnel or modernization in the out years."

Graham responded, "I look at it the other way. I'm looking at trying to make structure changes that will affect quality of life in a more reasonable way and I think $2 billion will help."

He added, "I will be your strongest advocate for structural changes because you have to, but not this way."

The hearing also touched on the Pentagon's controversial plan to reduce the Defense Commissary Agency's annual budget from $1.4 billion today to $400 million by 2017, a move that would force the agency to make major changes -- including possible widespread store closures.

Vollrath, in response to questions from Sen. Mazie Hirono, D-Hawaii, acknowledged that, if Congress approves the defense budget request, patronage at commissaries will probably decrease and some stores may close.

"It's a possibility, I don't know what the probability is," he said of the store closings. "Our hope ... [is] that we will still offer a benefit that the service members and their families will value."

Military personnel costs are budgeted at $177 billion in fiscal 2015, or more than a third of the department's non-war budget of $496 billion. Including civilian personnel, the percentage rises to almost half of the spending plan.

All told, the military compensation reforms -- reducing pay raises, freezing general officer pay, curbing basic allowances for housing, reducing commissary subsidies, consolidating Tricare plans and adopting travel restrictions -- are estimated to save the Pentagon almost $23 billion over five years, though almost half of that has already been budgeted for under previous health care initiatives.